Sunday, December 30, 2007

When oil at $100?

Oil prices pushed higher this week as concerns over the health of the US economy were overshadowed by a bullish combination of geopolitical events and falling US stockpiles.

Nymex West Texas Intermediate began a fresh assault on the $100-a-barrel level, hitting a one-month high of $97.79 on Thursday.

The assassination in Pakistan of Benazir Bhutto unleashed a fresh wave of speculative buying as geopolitical tensions in Asia and the Middle East intensified. On Wednesday, Turkey attacked Kurdish targets in northern Iraq, while Russia’s sale of an anti-aircraft missile system to Iran also ruffled some feathers

Meanwhile, Thursday’s US inventory data revealed a further drop in the country’s crude oil stockpiles below the five-year average.

Paul Horsnell at Barclays Capital said: “Since the end of June, US crude oil inventories have fallen by more than 60m barrels, and they are still falling relative to normal seasonal patterns.”